Further support for prices comes from labor strife in South Africa
By Claudia Assis and Sarah Turner, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures gained Monday, moving modestly higher as traders await a possible bond-buying announcement from the Federal Reserve later in the week.
Gold for December delivery GCZ2 +0.43% rose $6.80, or 0.4%, to trade at $1,738.60 an ounce on the Comex division of the New York Mercantile Exchange.
Gold futures ended lower on Monday but had recorded big gains last week after weaker-than-expected U.S. jobs data heightened expectations that the Fed will announce another round of monetary easing at the end of its two-day policy meeting Thursday.
In the short term, “much will depend on the outcome of the two-day [Federal Open Market Committee] policy meeting,” analysts at VTB Capital said in a note. Despite the hopes stoked by the negative jobs data, “there is a good chance of the Fed delaying any decision on further easing for a little longer while instead extending its ultra-low interest rate guidance through 2015,” they added
Gold has a traditional role as a store of value and thrives on fears of currency debasement and inflation.
The metal also got a boost from a spreading strike in a gold mine in South Africa.
Gold Fields Ltd. GFI +0.46% said a strike in its KDC gold mine has spread to another section. The mine produces about 1,440 ounces of gold a day.
In a statement Monday, the company said that about 15,000, or roughly half the workforce, are striking and that production has been suspended. It also called the strike “unlawful and unprotected,” in the latest turn involving labor unrest in South Africa’s mining industry. Read more about the Gold Fields strike.
Most other metals turned higher on Tuesday, with copper holding on to multi-month gains.
Copper for December delivery HGZ2 +0.31% rose 1 cent, or 0.4%, to $3.70 a pound, hovering at its best since May.
December silver SIZ2 +0.48% added 13 cents, or 0.4%, to reach $33.76 an ounce.
Platinum for October delivery PLV2 +0.39% declined $6.80 to $1,597.00 an ounce, while the December contract for sister metal palladium PAZ2 +0.66% traded down $1.90 to $670.85 an ounce.
The labor strife in South Africa colored the trading in platinum.
According to local media, workers at the Marikana mine operated by Lonmin PLC UK:LMI -1.45% — the scene of a bloody confrontation that left more than 30 people killed last month — protested again early Tuesday.
Production at Marikana has been effectively suspended since early August.
And workers at Impala Platinum’s ZA:IMP -0.93% Rustenburg mine have demanded a pay increase. Miners there were on a strike in January and February. Impala Platinum’s is the world’s No. 2 platinum producer.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Sarah Turner is MarketWatch's bureau chief in Sydney.
